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Similar to its peers, Jet Airways was done in over the past year by a cocktail of rising fuel cost, weakening rupee and inability to raise fares.
With the price of crude oil shooting above the $100 a barrel mark, and the rupee depreciating around 12 per cent against the US dollar, oil marketing companies repeatedly raised the cost of aviation turbine fuel.
The fuel is today around 30 per cent costlier than what it was a year ago. While costs soared, the airline found itself selling tickets below cost due to predatory pricing by some players. This caused losses to balloon, and in the September quarter, Jet Airways' loss was as high as Rs 714 crore.
While Jet Airways along with JetLite has held on to its position as the largest carrier in the domestic skies, this has been of little consolation, considering the heavy losses posted by the airline for three consecutive quarters.
Another concern about the airline has been its weakened balance sheet due to high leverage levels and its inability to raise funds to pare debt. The company's auditors have also raised the red flag in this regard.
The government's proposed move to allow foreign airlines to invest in Indian carriers may provide respite, but surprisingly Jet Airways is said to be opposed to the proposal.
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